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Most IMM currency futures end lower

CHICAGO: IMM currency futures ended an abbreviated session mostly weaker Friday, with strong US equities and comments by US Treasury Secretary Lawrence Summers pressuring the March euro into a sharp decline.

Nearby euros fell after Summers said Friday that Europe had not yet met the conditions needed to realise the full potential of the euro. Summers also said Europe and Japan must achieve faster growth to help the global economy.

"That (Summers) just kind of goosed it (the decline) along. It kind of kicked it into gear," one IMM currency futures trader said.

While Summers's comments may have been an impetus for the decline, strength in US stocks was a primary source of pressure, said Allison Montgomery, currency economist for IDEA global.com.

"A lot of it is still US equities' response to Greenspan last night. That certainly has been the trigger," she said.

Many market participants took Federal Reserve Chairman Alan Greenspan's speech on Thursday to mean the Federal Open Market Committee will likely hike interest rates 25 basis points when it next meets, rather than a more aggressive credit tightening. That interpretation supported US equities and pressured the euro.

March euro opened soft and then slipped when tame a US consumer price index supported US assets. Overall CPI rose 0.2 percent, versus an expected 0.3 percent rise, and core PPI rose 0.1 percent, versus a forecast of up 0.2 percent.

The contract breached support at $1.02480 and $1.02360 early.

In a wave of heavy selling, the contract fell further, with sell stops at $1.02200, $1.02000, and $1.01750 fuelling the decline, the trader said.

"Traders that we hadn't seen since the first of the year... they sold today," he said.

March yen opened firmer and seesawed, paring losses before the close. The contract touched intraday support at $0.009500, the pit session low, and bounced higher from there. Nearby yen pierced intraday resistance at $0.009544 on the way up.

March yen likely got a boost from selling of euro/yen, the trader said.

IMM currency futures trade at the Chicago Mercantile Exchange closed early Friday at noon ahead of Monday's Martin Luther King holiday, when trading will be closed.

At settlement, March yen was up $0.000040 at $0.009547, euros off $0.01150 at $1.01850, Swiss francs off $0.0083 at $0.6322, sterling off $0.0120 at $1.6346, Canadian dollar off $0.0008 at $0.6899, Australian dollars off $0.0016 at $0.6673 and Mexican pesos up $0.000375 at $0.103875.-Reuters